By Dr. Bobby Sarah

Life's best lessons are often learned from the worst mistakes.

As the business year closes we all have the task of looking at our books of accounts, calculating taxes and tallying the balances.Developing a financial strategy is important to keep your business healthy.

Few things to constantly keep an eye on

Know your numbers
Often we leave this to the financial expert ( the accountant or the chartered accountant). We need to have a system in place to track the income, expense, receivables and dues. How often should you track ? Daily if possible or atleast every 3rd day.

Identify cash flow blockages in your business
Payment billed is often not payment received. Ensure that all payments that are due are collected in a timely basis. If the amount is large and customer cannot pay at one go, negotiate a small payment and break it down into smaller payments in daily, weekly or monthly installments.
For eg : If 1 lakh is due
Can they pay 300 per day, 3000 per week or 10000 per month?

Keep your financial commitments
Ensure that you do not fall too far behind on vendor payments. Again apply the same principle and try to break down payments into manageable installments.

Don't mix your personal and business finances
The temptation to see the cash available in the business as your own cash should be resisted. As the business owner you must have a clear distinction between your personal finances and business finances. Many businesses fail for the lack of this discipline. Pay yourself a salary and use only that account for personal payments.

Optimise your resources
Reduce overhead expenses, increase your staff productivity to optimize the productivity. This will include a close monitoring of all activities that incur an expense. Ask yourself if you can survive without it or look for cheaper alternatives. Constantly reviewing staff to ensure maximum productivity is also important.

As the financial year ending approaches, learn from your past experiences and see how you can improve things little by little.

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